JJB Sports Puts Itself up for Sale after Financial Struggles Continue
By Community | August 30, 2012
Financially stricken sports retailer, JJB Sports, has put itself up for sale after admitting it is unlikely to raise new funds to keep the business afloat.
The struggle to keep the business afloat has been one of the continuing sagas of the sector this year, though its troubles date back to 2008.
Since then investors and suppliers pumped more than £225m ($357m) into the group alongside two insolvency procedures to ditch stores and reduce its rent bill.
However even the scaled-back, 180-shop operation has struggled. Underlying sales are down 3.3 per cent from already depressed level and more worrying, the cash margin has decreased 9.5 per cent.
JJB currently has bank debt of £16.5 million ($26m), £18.75 million ($29.7m) in convertible loan notes and has also drawn down £1.1 million of another loan facility.
In a statement to the stock exchange this morning, the group said: “The company has continued its discussions with its strategic partners regarding a further capital raising and restructuring of its store portfolio to facilitate the turnaround of the group’s trading performance.
“However, following these discussions, the Directors do not believe that the company will be able to raise the level of funds required to implement the turnaround.
“As a result, the board has decided to conduct a formal sale process of the company and now wishes to invite offers to support further investment in the company, which may result in a sale of the company or its assets.”